Organogenesis requires the ordered execution of temporally and spatially defined cell proliferation and differentiation programs. These are controlled in a major part by changes of gene expression in the partaking cells. Aberrations from the normal pattern of gene expression can cause developmental defects and other pathologies. This proposal describes experiments to study the regulation of such processes by analyzing the function of DREF/dMLF in the control of Drosophila eye development. The transcription factor DREF is a potential key regulator of proliferation-specific gene expression and the Drosophila homologue of myelodisplasia ! myeloid leukemia factor (dMLF) is a possible negative regulator of DREF and cell proliferation. The working model that guides this work can be broken up into the following hypotheses: (1) DREF regulates two important aspects of cell proliferation: cell growth and cell cycle progression. (2) DREF's transcriptional and developmental functions are negatively regulated by dMLF. (3) In the regulation of genes involved in cell cycle progression, DREF cooperates with E2F, a well characterized transcription factor of similar function that is regulated by Rb and has been implicated in the etiology of retinoblastoma. (4) Other DREF target genes such as those directing cell growth are regulated by DREF in a E2F-independent fashion. These hypotheses will be tested by examining the role of DREF, E2F, and dMLF in cell growth and division during development of the eye imaginal disc using genetic approaches paired with microscopic methods and flow cytometry. The regulatory function of DREF and E2F will be dissected by epistasis analyses, monitoring of target gene activation and by SAGE studies to identify common and independently regulated genetic programs. These studies will elucidate regulatory mechanisms that are critical for eye development, characterize DREF, a potentially important regulatory component of tissue growth during organogenesis, and provide insight into processes that may contribute to the control of cell proliferation in normal development and under deregulated conditions resembling neoplasia.